Cunningham v. Lyft, Inc.

17 F.4th 244
Court of Appeals for the First Circuit·Decided November 5, 2021·No. 20-1373P·Published·Cited by 17 cases

Opinion

United States Court of Appeals For the First Circuit

Nos. 20-1373, 20-1379

MELODY CUNNINGHAM, individually and on behalf of all others similarly situated; FRUNWI MANCHO, individually and on behalf of all others similarly situated,

Plaintiffs, Appellees/Cross-Appellants,

MARTIN EL KOUSSA, individually and on behalf of all others similarly situated; VLADIMIR LEONIDAS, individually and on behalf of all others similarly situated,

Plaintiffs,

v.

LYFT, INC.; LOGAN GREEN; JOHN ZIMMER, Defendants, Appellants/Cross-Appellees.

Nos. 20-1544, 20-1549, 20-1567

MELODY CUNNINGHAM, individually and on behalf of all others similarly situated; FRUNWI MANCHO, individually and on behalf of all others similarly situated; MARTIN EL KOUSSA, individually and on behalf of all others similarly situated; VLADIMIR LEONIDAS, individually and on behalf of all others similarly situated,

Plaintiffs, Appellees/Cross-Appellants, v.

LYFT, INC.; LOGAN GREEN; JOHN ZIMMER, Defendants, Appellants/Cross-Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Indira Talwani, U.S. District Judge]

Before

Lynch and Kayatta, Circuit Judges, and McElroy,* District Judge.

Elaine J. Goldenberg, with whom Jeffrey Y. Wu, Benjamin G.

Barokh, Donald B. Verrilli, Jr., Rachel G. Miller-Ziegler, Rohit K. Singla, Justin P. Raphael, Adele M. El-Khouri, Munger, Tolles & Olson LLP, James D. Smeallie, David J. Santeusanio, Andrew E. Silvia, Michael T. Maroney, and Holland & Knight LLP were on brief for appellants.

Ben Robbins and Martin J. Newhouse on brief for New England Legal Foundation, amicus curiae.

Steven P. Lehotsky, U.S. Chamber Litigation Center, Inc., Archis A. Parasharami, and Mayer Brown LLP on brief for Chamber of Commerce of the United States of America, amicus curiae.

Shannon Liss-Riordan, with whom Anastasia Doherty, Adelaide H. Pagano, Anne R. Kramer, and Lichten & Liss-Riordan, P.C. were on brief for appellees.

Hugh Baran on brief for National Employment Law Project, Massachusetts Coalition for Occupational Safety and Health, Justice at Work, and New York Taxi Workers Alliance, amici curiae.

November 5, 2021

* Of the District of Rhode Island, sitting by designation.

KAYATTA, Circuit Judge. Plaintiffs are Massachusetts-

based rideshare drivers who use the Lyft application and platform to find passengers. Plaintiffs claim that Lyft misclassifies them as independent contractors, rather than employees. They seek relief on their own behalf and on behalf of other drivers who worked for Lyft in Massachusetts, although a class has not been certified.

The parties joined issue in a flurry of motions leading to rulings concerning plaintiffs' requests for preliminary injunctive relief and Lyft's request to compel arbitration. Lyft now presses an interlocutory appeal from the denial of its motion to compel arbitration, while plaintiffs press interlocutory cross- appeals from the denial of requests for preliminary injunctive relief, including a so-called "public injunction."1 For the following reasons, we reverse the order denying Lyft's motion to compel arbitration, and affirm the denials of preliminary injunctive relief.

I.

Lyft, Inc., a ridesharing company, uses a smartphone application to allow customers to hail drivers. Cunningham v. Lyft, 450 F. Supp. 3d 37, 39 (D. Mass. 2020). In order to work

1Lyft also appealed the order denying the "public injunction"

request, to preserve the argument that the order should be vacated for lack of jurisdiction due to the pendency of Lyft's earlier appeal.

for Lyft as a driver, "an individual must register, download the application, and agree to Lyft's Terms of Service." Id. The Terms of Service spell out how a driver qualifies to use the platform to connect with riders and how fares are set, collected, and apportioned. See Cunningham v. Lyft, No. 1:19-cv-11974-IT, 2020 WL 2616302, at *6 (D. Mass. May 22, 2020).

Lyft considers its drivers "independent contractors" and does not provide them with sick leave benefits. Id. Although drivers may drive as much or as little as they want, and may also reject ride requests, Lyft retains the right to deactivate drivers who violate the Terms of Service or fall below Lyft's "star rating or cancellation threshold." Id.

In 2018, Lyft updated its Terms of Service. Drivers could not continue using Lyft to pick up riders until they signaled their acceptance of the updated Terms of Service by clicking the "I accept" button. Cunningham, 450 F. Supp. 3d at 39. Those revised terms stated, in relevant part, that "[t]hese provisions will, with limited exception, require you to submit claims you have against Lyft to binding and final arbitration on an individual basis, not as a plaintiff or class member . . . As a driver or driver applicant, you have an opportunity to opt out of arbitration with respect to certain claims." Id. at 39–40 (capitalization altered). Drivers could also follow a hyperlink directly to the

section in the updated Terms of Service containing the arbitration provision. That section states in relevant part:

YOU AND LYFT MUTUALLY AGREE TO WAIVE OUR RESPECTIVE RIGHTS TO RESOLUTION OF DISPUTES IN A COURT OF LAW BY A JUDGE OR JURY AND AGREE TO RESOLVE ANY DISPUTE BY ARBITRATION, as set forth below. This agreement to arbitrate ("Arbitration Agreement") is governed by the Federal Arbitration Act . . . ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. Except as expressly provided below, this Arbitration Agreement applies to all claims (defined below) between you and Lyft, including our affiliates, subsidiaries, parents, successors, and assigns, and each of our respective officers, directors, employees, agents, or shareholders . . . . Except as expressly provided below, ALL DISPUTES AND CLAIMS BETWEEN US . . . SHALL BE EXCLUSIVELY RESOLVED BY BINDING ARBITRATION SOLELY BETWEEN YOU AND LYFT. These claims include but are not limited to any dispute, claim, or controversy, whether based on past, present, or future events, arising out of or relating to: this Agreement and prior versions thereof . . . the Lyft Platform, the Services, any other goods or services made available through the Lyft Platform, your relationship with Lyft . . . state or federal wage-hour law . . . .

Id. at 40 (alterations in original). The agreement also includes a "Prohibition of Class Actions and Non-Individualized Relief." Id.2 Finally, the agreement provides that "disputes regarding the

2 This prohibition reads:

YOU UNDERSTAND AND AGREE THAT YOU AND LYFT MAY EACH BRING CLAIMS IN ARBITRATION AGAINST THE OTHER ONLY IN AN INDIVIDUAL CAPACITY AND NOT

scope, applicability[,] enforceability, revocability or validity of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator." Id. at 40– 41.

Plaintiff Melody Cunningham has been driving for Lyft since June 2013. Plaintiff Frunwi Mancho has been driving for Lyft since January 2016. Both clicked the "I accept" button on the updated Terms of Service in 2018 and neither opted out of the arbitration agreement. Id. at 41. Both Mancho and Cunningham used the Lyft platform to pick up passengers, some of whom were traveling to or from Logan Airport in Boston, Massachusetts. Id.

ON A CLASS, COLLECTIVE ACTION, OR REPRESENTATIVE BASIS ("CLASS ACTION WAIVER").

YOU UNDERSTAND AND AGREE THAT YOU AND LYFT BOTH ARE WAIVING THE RIGHT TO PURSUE OR HAVE A DISPUTE RESOLVED AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, COLLECTIVE OR REPRESENTATIVE PROCEEDING ...

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Cunningham v. Lyft, Inc., 17 F.4th 244 (1st Cir. 2021).

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